The investor pressure began building on Marc Benioff, chief executive of Salesforce.com, two weeks ago.
On Sept. 23, news broke that Mr. Benioff’s company was in discussions to buy the troubled social media company Twitter. Inside the offices of hedge funds and mutual fund companies on Wall Street and elsewhere, investors in Salesforce immediately began to question the rationale for buyingTwitter. They were not happy.
The investors made their concerns known to Mr. Benioff. In emails and other communications, the shareholders told the chief executive and Salesforce’s investor relations team that they disapproved of a tie-up with Twitter.
The effort was led by Fidelity Investments, the mutual fund firm that is Salesforce’s largest shareholder, with about 14 percent of the company. At least one Fidelity portfolio manager emailed Salesforce about the deal being a bad idea, according to people briefed on the correspondence, who spoke on the condition of anonymity because the communications were private. Other Salesforce investors, including hedge funds, said they would sell the company’s stock, according to two people with knowledge of the communications.
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By this Wednesday, when Mr. Benioff spoke at an investor meeting at a San Francisco hotel, his language about any deal had turned conciliatory and defensive.
“I read all of your notes, you probably know that,” Mr. Benioff said. “I also read your emails. And as I digest all of that information, this is actually the No. 1 thing that has been on my mind. In some cases we have been unusually surprised and we have had to do a reset.”
The pushback offers a window into how big investors can exert pressure on would-be deals behind the scenes. Salesforce is particularly vulnerable to what its large institutional investors think because the unprofitable online software company relies heavily on its stock to make acquisitions and pay employee compensation. As a result, the company needs to keep investors happy for its share price to continue going up.
Salesforce declined to comment, as did a representative from Fidelity.
It is unclear whether or not Mr. Benioff will continue to pursue Twitter. One person involved in the negotiations said that, for now, Salesforce’s shareholders have halted a potential deal.
For Twitter, that would mean that its options have narrowed. The social media company had been talking to potential buyers, as well as considering divestitures and layoffs to focus its business. But companies including Google, Apple and Disney are not interested in buying Twitter, people at those companies said, and Salesforce appeared to be one of the last interested parties.
Twitter declined to comment. Recode earlier reported that Google, Apple and Disney would not make bids.
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